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Web merchants expect a bigger ROI on their tech spending in 2012

December 27, 2011 11:53 AM

More retailers plan on increasing their spending on e-commerce technology and services in 2012. But in line with more spending on new applications and services, web merchants also expect to see a much higher return on investment, according to research contained in Internet Retailer’s newly published 2012 Complete Guide to E-Commerce Technology.

For 68.0% of merchants, attracting new customers is the main reason to increase spending on e-commerce applications and services, followed by 63.9% that see a bigger technology investment as a way to boost conversion rates, 60.8% that want to generate more sales from repeat customers, 32.0% that aim to attract more traffic and sales through mobile commerce, 29.9% that want to reach more buyers through social media, and 18.6% that hope to increase ticket size.

For Market America, an online retailer of private-label cosmetics and health and beauty aids and operator of comparison shopping engine Shop.com, spending on technology will increase between 15% and 20% in 2012, says chief technology officer Michael Brady. The online retailer’s biggest priority is migrating to a universal e-commerce platform that features more than 30 million products, faster site search, an enhanced shopping cart that lets consumers purchase merchandise from participating retailers directly on the Shop.com marketplace, and more content such as buyer guides and other tools.

When work on the fully integrated platform is complete sometime in the first quarter of 2012, Market America shoppers also will be able to use their customer loyalty perks to make purchases on Shop.com, including the “Paid to Shop” program that awards customers 2% to 50% back on all purchases made on MarketAmerica.com and its sister sites, the company says. The retailer is currently working on integrating the customer histories and profiles of more than 3.6 million shoppers from Market America and Shop.com, Brady says. Market America, No. 61 in the Internet Retailer Top 500 Guide, won’t be adding any new applications to its updated e-commerce platform, Brady says. The company acquired Shop.com for an undisclosed sum in December 2010, largely for its advanced technology.

With a better e-commerce infrastructure in place, Market America’s next e-commerce spending priorities are to add mobile commerce and expand further into social media. “When the platform is fully operational our shoppers will be able to shop both MarketAmerica.com and Shop.com with better navigation and an enhanced shopping cart, and do it how and when they want with mobile and social commerce,” Brady says.

But in order to completely integrate Shop.com’s technology and roll out new mobile or social features, Market America also needs to hire more web designers, programmers and other e-commerce specialists. “We’re looking to add at least a dozen people,” Brady says.

With online retail sales expected to once again grow by double digits in 2012 and more consumers permanently shifting a bigger portion of their shopping from stores and catalogs to online, web merchants will be ramping up their spending on better e-commerce systems and services for at least the foreseeable future, says Michael Griswold, a research vice president and e-commerce technology analyst with Gartner Inc.

“The pace of e-commerce technology development will do nothing but accelerate going forward and the retailers that want to keep bringing the best customers to their e-commerce, mobile and social media sites will keep on investing in better systems,” Griswold says. “For retailers that keep on making timely and well thought out decisions about future investments in their e-commerce infrastructure, better technology will give them a big competitive advantage.”

The fact-filled 416-page 2012 Complete Guide to E-Commerce Technology contains business profiles and vital product, pricing and retailer client details on more than 1,200 application developers and service providers in 23 e-commerce market segments. The guide also contains the names and contact information of 4,000 executives at all of America's e-commerce technology vendors.